Sugar Prices Retreat on Signs of a Larger Sugar Crop in India

Core Insights - Sugar prices are experiencing downward pressure, with NY sugar reaching a 5-year nearest-futures low due to increased production forecasts from major producers like India and Brazil [2][4]. Production Estimates - The India Sugar Mill Association (ISMA) has raised its 2025/26 sugar production estimate for India to 31 million metric tons (MMT), an increase of 18.8% year-on-year from the previous forecast of 30 MMT [2]. - Brazil's crop forecasting agency, Conab, has increased its 2025/26 sugar production estimate for Brazil to 45 MMT, up from 44.5 MMT [3]. - Datagro projects Brazil's Center-South sugar production for 2026/27 to rise by 3.9% year-on-year to a record 44 MMT [4]. Market Dynamics - The recent selloff in sugar prices is attributed to higher sugar output in Brazil and expectations of a global sugar surplus, with BMI Group projecting a surplus of 10.5 MMT for 2025/26 [4]. - Unica reported that Brazil's Center-South sugar output in the first half of October increased by 1.3% year-on-year to 2.484 million tons (MT) [5]. - The percentage of sugarcane crushed for sugar in Brazil's mills rose to 48.24% in the first half of October, up from 47.33% the previous year [5]. Weather Impact - India's Meteorological Department reported that cumulative monsoon rainfall was 937.2 mm as of September 30, which is 8% above normal, indicating a strong monsoon that may lead to a bumper sugar crop [6]. - The National Federation of Cooperative Sugar Factories in India projected a 19% year-on-year increase in sugar production for 2025/26 to 34.9 MMT, following a significant decline in 2024/25 [6].